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Report for the 3Rd Quarter 2011

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Report for the 3Rd Quarter 2011 REPORT FOR THE 3RD QUARTER 2011 1 HIGHLIGHTS OF Q3 2011 Financial • Revenue for the first 9 months of 2011 up 4%, Q3 2011 at EUR 98.5 million discussion -7.0% due to the weather-related factors, in line with general sector performance • Winter season started late – (jacket) sales shifted from September into the 4th quarter • Gross profit margin for 9M 2011 increased to 50.6% • Adjusted EBITDA for 9M 2011 EUR 5.6 million • Adjusted earnings for 9M 2011 is EUR -6.4 million Turnaround • Fine tuning of Turnaround ongoing • Price increase in the first nine months of 2011 +11.2% • Cost effective procurement through MGB in Asia increased by 10.4% Growth • Expansion of store network exceeded expectations – cost-effective acquisitions • 8 new stores opened and 18 Wehmeyer retail outlets acquired • Sales growth from new stores 9M 2011 EUR 17.4 million Operational • Like-for-like sales in 9M 2011 +1% up to EUR 293 million, Q3 EUR 90.7 million, improvements down -10,1% due to weather-related factors • Traditional marketing measures produce results – new campaigns planned • Modernisation of existing stores continues with the aim of improving sales Outlook • Another 7 new store openings planned for 2011 (total to exceed 30) • Good sales performance expected in Q4 2011, strong year-end business anticipated • Outlook for 2011 confirmed Sales by quarter Adjusted earnings in EUR million EBITDA & EBIT by quarter in EUR million 150 40 142.0 31.0 27.7 124.6 30 112.7 105.9 98.5 100 20 91.9 11.9 12.3 84.2 8.7 8.9 10 2.7 0.3 50 0 -0.7 -3.1 -10 -7.4 -7.0 0 -20 -11.0 -10.4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2010 2010 2010 2010 2011 2011 2011 2010 2010 2010 2010 2011 2011 2011 EBITDA EBIT 2 REPORT FOR THE 3RD QUARTER 2011 / HIGHLIGHTS, KEY FIGURES & SPECIAL TOPICS CONTENTS Highlights, key figures & special topics 2 Highlights 3 Key figures 4 Acquisition of Wehmeyer 6 Marketing campaigns in Q3 2011 8 Investor Relations 11 History of ADLER 11 ADLER equity story 12 ADLER share 13 Group interim management report 16 Economic conditions, sector and commodity market development 16 Sales analysis 17 Financial performance 20 Financial position and cash flows 23 Opportunities and risk report 27 Events after the reporting date, October 2011 27 Report on expected developments, full-year 2011 27 Consolidated interim financial statements 30 Income statement 30 Statement of financial position (balance sheet) 32 Statement of changes in equity 34 Statement of cash flows 35 Statement of comprehensive income 36 Notes to the consolidated financial statements 37 Segment reporting 46 Responsibility statement 49 Further information 50 About ADLER Modemärkte 50 Opening of four new ADLER fashion stores in the third Marketing outlook for Q4 2011 and 2012 51 Quarter of 2011 in Berlin-Charlottenburg, Hamburg-Harburg, Bad Hersfeld and Altenburg. Contact data, financial calendar, contact 54 The opening in Essen in the On September 30, 2011 ADLER took over 18 first half of 2011. branches of Wehmeyer Lifestyle GmbH. 3 REPORT FOR THE 3RD QUARTER 2011 / HIGHLIGHTS, KEY FIGURES & SPECIAL TOPICS CONSOLIDATED KEY FIGURES Q3 Q3 Change 9M 9M Change Income statement 2011 2010 absolute relative 2011 2010 absolute relative Sales EUR mn 98.5 105.9 -7.4 -7.0% 315.0 302.9 12.1 4.0% … of which like-for-like sales in existing stores 1) EUR mn 90.7 100.9 -10.2 -10.1% 293.0 291.4 1.6 0.5% … of which sales in new stores 1) EUR mn 6.4 3.0 3.4 113.3% 17.4 5.9 11.5 194.9% Material expenses EUR mn -49.7 -53.2 3.5 -6.6% -155.5 -150.9 -4.6 3.0% Gross profit EUR mn 48.8 52.7 -3.9 -7.4% 159.5 152.0 7.5 4.9% Gross profit margin % 49.5% 49.8% 0.2 -0.4% 50.6% 50.2% 0.4 0.8% EBITDA EUR mn 0.1 2.7 -2.6 -96.3% 4.7 7.2 -2.5 -34.7% …. Non recurring IPO expense EUR mn -0.2 - -0.2 -0.9 0.0 -0.9 Adjusted EBITDA EUR mn 0.3 2.7 -2.4 -88.9% 5.6 7.2 -1.6 -22.2% Adjusted EBITDA margin % 0.3% 2.5% -2.2 -88.1% 1.8% 2.4% -0.6 -25.0% Depreciations EUR mn -3.4 -3.4 -10.2 -10.2 EBIT EUR mn -3.3 -0.7 -2.6 -5.5 -3.0 -2.5 83.3% Adjusted EBIT EUR mn -3.1 -0.7 -2.4 -4.6 -3.0 -1.6 53.3% Adjusted EBIT margin % -3.1 -0.7% -2.5 -1.5% -1.0% -0.5 50.0% Earnings before tax from ordinary activities EUR mn -4.0 -0.8 -3.2 -8.0 -3.6 -4.4 Adjusted earnings before tax from ordinary activities EUR mn -3.8 -0.8 -3.0 -7.1 -3.6 -3.5 97.2% Income taxes EUR mn 0.3 0.1 0.2 1.4 0.1 1.3 Net income from continuing operations after taxes EUR mn -3.7 -0.7 -3.0 -6.6 -3.5 -3.1 -88.6% Non recurring deferred taxes on IPO expense EUR mn -0.7 -0.7 -0.7 0.0 -0.7 Adjusted net income from continuing and discontinued operations EUR mn -4.2 -0.7 -3.5 -6.4 -3.5 -2.9 82.9% 1) excluding online shop and rebuilded markets in 2010 Q3 Q3 Change 9M 9M Change Key figures per share 2011 2010 absolute 2011 2010 absolute Adjusted net income per share (continuing operations) EUR -0.24 -0.04 -0.20 -0.37 -0.20 -0,17 Non-recurring IPO expense EUR 0.02 0.00 0.02 -0.02 0.0 -0,02 Earnings per share (continuing operations) EUR -0.22 -0.04 -0.18 -0.39 -0.20 -0,19 4 REPORT FOR THE 3RD QUARTER 2011 / HIGHLIGHTS, KEY FIGURES & SPECIAL TOPICS CONSOLIDATED KEY FIGURES 30.Sep.2011 - 30.Sep.2010 30 Sep. 31 Dec. 30 Sep. Change Net assets 2011 2010 2010 absolute relative Total assets EUR mn 197.7 162.7 218.8 -21.0 -10% Non-current assets EUR mn 68.6 67.5 62.2 6.4 10% Current assets excluding cash and cash equivalents EUR mn 106.4 62.2 126.0 -19.6 -16% Inventories EUR mn 94.3 56.7 70.8 23.5 33% Cash and cash equivalents EUR mn 22.8 33.0 30.6 -7.8 -25% Equity EUR mn 59.7 41.2 66.8 -7.1 -11% Equity ratio % 30.2% 25.3% 30.5% Non-current liabilities EUR mn 39.6 47.2 47.0 -7.4 -16% Current liabilities EUR mn 98.4 74.4 105.0 -6.6 -6% Debt/equity ratio 2.31 2.95 2.28 Q3 Q3 Change 9M 9M Change Financial position 2011 2010 absolute relative 2011 2010 absolute relative Cash flows from operating activities (net cash flow) EUR mn -12.3 8.8 -21.1 -15.1 11.5 -26.6 Investment EUR mn 3.6 2.0 1.6 80% 7.6 3.2 4.4 138% Cash flows from investing activities EUR mn -5.8 -2.3 -3.5 -9.8 -8.0 -1.8 Free cash flow EUR mn -18.1 6.5 -24.6 -24.9 3.5 -28.4 Q3 Q3 Change 9M 9M Change Employees 2011 2010 absolute relative 2011 2010 absolute relative Number of employees as of 30 Sep. incl. Wehmeyer number 4.407 4.044 +363 +8,2% Personnel expenses EUR mn 18,2 18,1 0,1 0,6% 57,0 54,6 2,4 4,4% 30 Sep. 31 Dec. 30 Sep. Stores by country 2011 2010 absolute Number of Stores 2011 Total number of stores 161 135 +26 Total number of stores 161 of which in Germany 133 107 +26 of which existing stores 120 of which in Austria 26 26 of which new stores 41 of which in Luxembourg 2 2 of which new stores opened or acquired in 2010 15 of which new stores opened or acquired in 2011 26 5 REPORT FOR THE 3RD QUARTER 2011 / HIGHLIGHTS, KEY FIGURES & SPECIAL TOPICS FOCUS ON GROWTH STRATEGY Risk-adjusted store growth by 4 stores in the first half of 2011 Already during the first half of 2011 ADLER focused on expanding its stores network. Thus, ADLER had opened four new stores in the first half of 2011: Essen, Kulmbach, Neunkirchen/Saar and Herne. In total, ADLER thus grew from 135 stores (December 31, 2010) to 139 stores worldwide as of June 30, 2011. Reliable growth by additional 4 stores in Q3 2011 Four additional stores were opened in the third quarter of 2011: Berlin-Reinickendorf, Hamburg-Harburg, Bad Hersfeld and Altenburg. ADLER has taken a risk-adjusted approach to opening new stores since they require capital expenditures on equipment and inventories. The expected break-even point and return on investment are always key factors when deciding whether to open a new store. ADLER’s objective is to grow by approximately 20 stores per year, through both sustainable organic growth and acquisitions. Acquisition of 18 Wehmeyer stores ADLER further accelerated its store expansion in Q3 2011. This can be seen in particular in ADLER’s acquisition of Düsseldorf-based Wehmeyer Lifestyle GmbH’s retail stores, which generated revenue of approximately EUR 40 million in financial year 2010.
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